April 16 (Bloomberg) -- Abbott Laboratories, the largest
maker of heart stents and adult nutritional drinks, reported
first-quarter profit that beat reduced expectations of analysts,
as only diagnostic and eye care products turned in higher sales.

Profit excluding one-time items of 41 cents a share
exceeded by 5 cents the average of 19 analyst estimates compiled
by Bloomberg. The company confirmed its 2014 earnings forecast
excluding one-time items of $2.16 to $2.26.

“Most divisions were broadly in line with expectations,
with tough comps in the quarter being well flagged,” wrote
Jeffrey Holford, an analyst at Jefferies International in New
York. “We see increased potential for a guidance raise in the
second or third quarter.”

Profit benefited from lower-than-expected research and
development costs and other spending in the quarter, said Chief
Executive Officer Miles White. The shortfall resulted from the
timing of certain costs, which will now come later in the year,
White said on a conference call.

“I want to see another quarter played out to see what
those underlying trends are,” he said. “I still think it’s
early in the year to be making adjustments to expectations but,
frankly, it’s possible I think there’s a pretty good chance some
of this is sustainable,” especially if the economy starts to
pick up.

Acquisition Interest

White also said that he is more interested in deals now,
after spending the past year disentangling Abbott from AbbVie
Inc., following the Jan. 1, 2013, split of the company. While
White declined to specify the exact size or area for
acquisitions, the possibilities are “fairly significant” and
across a couple of sectors, he said.

“You know, I like what’s on the menu,” White said. “It
won’t be next week, but I see things coming here that will be
nice additions to the business.”

Revenue fell to $5.2 billion from $5.38 billion a year
earlier, hurt by unfavorable foreign exchange rates for the
Abbott Park, Illinois-based company, which gets 70 percent of
its sales from outside the U.S. A recall of infant formula in
Asia last year, and the shutdown of a plant in the generic drug
business, crimped the company’s two largest units.

Abbott shares rose 1.1 percent to $38.38 at 4 p.m. in New
York. The shares have gained 5.4 percent in the past twelve
months.

“Within the established pharmaceutical division, we were
encouraged by the trends in developed markets, with the emerging
markets weakness tied to a one-time plant shut down,” wrote
David Roman, an analyst at Goldman Sachs in New York.

Business ‘Turn’

“This could mark a turn in the business,” Roman said.
“Elsewhere, we see a clear path to acceleration in both
nutrition and devices, and thus are comfortable with a view that
growth should improve from here.”

Net income fell 31 percent to $375 million, or 24 cents a
share, from $544.7 million, or 34 cents, a year earlier, the
company said in a statement.

Abbott’s former drug business was split off into AbbVie
while Abbott retained the original company’s medical devices,
nutritional products, diagnostic tests and generic drugs.